Charles Schwab sees synergies in combining units

NEW YORK (Reuters) - Charles Schwab (SCHW.O), the biggest U.S. online broker, said on Monday it had combined its institutional branch with its corporate and retirement services branch to take advantage of "clear synergies."

The combined unit, Institutional Service, will handle independent investment advisers, corporate benefit plan sponsors, and third party retirement plan recordkeepers, Schwab said in a statement.

The discount brokerage did not outline cost savings or mention changes in headcount. A spokeswoman was not immediately available to comment.

The combination will "enable us to leverage strong expertise we have in both groups," Schwab Chief Executive Walt Bettinger said in the statement. He added there were "clear synergies" between the two old units.

Jim McCool -- who was corporate executive vice president, and responsible for the corporate and retirement services branch -- will head the new unit.

Schwab shares were off 1.9 percent at $16.29 on the Nasdaq Stock Market, underperforming its closest competitors, TD Ameritrade (AMTD.O) and E*Trade Financial (ETFC.O).

Shares of the San Francisco-based company tumbled more than 7 percent on Friday afternoon after it announced it would not participate in the U.S. government's $700 billion rescue program for the financial industry.

The company said federal support was not necessary because it had a "strong and flexible balance sheet with multiple sources of liquidity and strong credit ratings."

E*Trade, which has been hit hard by the mortgage-market collapse, has said it applied for $800 million (531 million) in government funds. The larger TD Ameritrade did not apply.

(Reporting by Jonathan Spicer; editing by John Wallace)